Question

In: Accounting

Grippers expects cost of goods sold to average 65% of the current month’s sales and the...

Grippers expects cost of goods sold to average 65% of the current month’s sales and the company expects to sell 4,300 pairs of shoes in March for $240 each. Grippers’ target ending inventory is $10,000 plus 50% of the next month’s cost of goods sold.

Use this information plus the sales budget from Question 1 to prepare Grippers’ inventory, purchases, and cost of goods sold budget for January and February.

Sales budget from question 1:

Particulars:

Cash Sales in January = 185,000.00

Cash sales in February = 192,500.00

Total = 377,500.00

Credit sales in January = 5,55,000.00

Credit sales in February = 5,77,500.00

Total credit sales = 11,32,500.00

Total Sales in January = 7,40,000.00

Total sales in February = 7,70,000.00

Total = 15,10,000.00

In addition, indicate what the total cost of goods sold will be for the 2 months.

1. cost of goods sold for January is:

2. Cost of goods sold for February is:

3. Total cost of goods sold for the 2 month is:

4. Desired ending inventory for January is:

5. Desired ending inventory for february is:

6. Beginning inventory for January is:

7. Beginning Inventory for February is:

8. Purchases for January are:

9. Purchases for february are:

Expert Solution

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1. cost of goods sold for January is:481000

2. Cost of goods sold for February is:500500

3. Total cost of goods sold for the 2 month is:981500

4. Desired ending inventory for January is:260250

5. Desired ending inventory for february is:345400

6. Beginning inventory for January is:250500

7. Beginning Inventory for February is:260250

8. Purchases for January are:490750

9. Purchases for february are:585650

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